ED sniffs Fema breach, seizes assets worth Rs 1.59 cr from Pradip D Kothari

Says Kothari Industrial Corp chief held money abroad without RBI nod, didn't inform tax authorities

The Enforcement Directorate (ED) Chennai has seized movable properties worth Rs 1.59 crore belonging to Pradip D Kothari, chairman and managing director of Kothari Industrial Corporation Limited.

The ED said the properties were attached under the provisions of the Foreign Exchange Management Act, 1999 (Fema), following investigations against persons holding foreign assets without proper approvals.

A case was investigated under Fema against Kothari in respect of credit of foreign exchange worth $352,258 held in Xenios Foundation in HSBC Bank, Geneva, suspected to be held outside India in contravention of the provisions of Section 4 of Fema.

During investigations it was admitted that amount was kept in foreign accounts without proper permission from RBI and without declaring the assets to tax authorities.

The ED further said that Kothari could not produce any evidence to show that the said amount was repatriated to India. It is a violation under Section 4 of Fema read with Regulation 3 of Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000.

As per the new provisions of Section 37A(1) of Fema, an authorised officer can seize amounts in India equivalent value to the assets held abroad.

Accordingly, ED Chennai, seized Rs 1.59 crore of Pradeep D Kothari under these provisions.